eBay and Amazon see opportunity in rural America and are calling for better resources to “unlock the digital potential” of rural sellers. There are 37 million working-age adults in the rural US who account for close to 15% of the adult population, but annual revenues of rural businesses represent only 3.7% of total gross revenues in the US economy, according to Amazon.
eBay published a post written by one of its sellers who called for economic development to help him and sellers like him compete in the modern, global economy.
Bill Ingersoll sells Motocross and ATV equipment on eBay. “Unfortunately, the national discussion has focused on how to “save” rural America,” he said. “Well, I grew up in rural upstate New York. Specifically, Sloansville, which is about 20 miles outside Schenectady. And we don’t need saving. We’re not asking for, and we wouldn’t accept, a handout. We’re entrepreneurial. All we want is the chance to compete in the modern, global economy.”
In his post, he cited three areas that were crucial for sellers like himself to succeed, which we’ve identified as follows:
1) Affordable, accessible USPS shipping
“Eighty percent of what I ship goes through the USPS. If prices go up substantially, or if I stop being able to rely on USPS service altogether, my business would suffer. And I simply can’t rely on private shippers, who charge large surcharges for pickup and delivery to rural areas.”
2) Broadband access to the Internet (buyers and sellers)
“Rural America needs broadband access. My business exists because eBay exists, and almost all of my revenue comes through selling on the platform.”
3) Access to global markets
“Finally, a lot of people think globalization hurt rural America. I don’t know if that’s true, but if my business is any sign, the global economy can also be a real benefit to places like Sloansville. Increasingly, I’m selling parts overseas, to countries like the United Kingdom and Canada. It doesn’t take a PhD to see that the global economy gives me access to hundreds of millions of potential customers, and that’s where my business is going to grow.” And, he said, “Red tape in international trade is a guaranteed way to put rural America at a competitive disadvantage.”
Amazon also called for ways to improve the economic potential of those in rural America. It outlined recommendations for the private and public sectors, including the following:
1) Expanding education and training programs
2) Helping rural areas attract tech talent
3) Increasing the availability of high-speed internet access and mobile phone connectivity
Amazon commissioned the US Chamber of Commerce to research the topic, and said findings show the following:
- Increased adoption of online tools and digital services for businesses across rural America could create more than 360,000 jobs in the next three years.
- Increased adoption could grow annual revenues of rural small businesses by 21% over the next three years – the equivalent of $84.5 billion per year – with states in the South seeing the greatest benefit.
- Online tools and technology have the highest potential impact on rural small businesses with annual revenue under $100,000.
According to the research, southern states are among the ones that would benefit the most from increased adoption of online tools and digital services, with rural businesses in West Virginia (+57.6%), Alabama (+32.9%), Mississippi (+32.8%), and Georgia (+31.5%) experiencing some of the largest revenue growths over the next three years. Texas, Ohio, and Mississippi would gain the highest number of new jobs, with the Lone Star state adding an average of 23,400 new jobs per year over the next three years.
The report, based on a survey of 5,300 businesses in rural America, outlined a number of recommendations for the public and private sectors to help unlock the unrealized economic potential of rural America, including:
- One-in-five rural businesses are already digital. Nearly 20% of rural small businesses in America generate the vast majority of their revenue (at least 80%) by selling their products and services online.
- Technology is boosting rural business revenues. Rural businesses say adoption of digital technologies are important for their future, with 55.2% of them agreeing that e-commerce helps them grow their customer base and a similar percentage (54.6%) confirming that online tools had a positive impact on their revenue in the past three years.
- Online services help rural businesses reach customers out of state and overseas. Almost 40% of these small business owners say that digital technology has allowed them to sell beyond their state and 16% of them confirm they are selling internationally due to their access to digital tools. Thirty-three percent sell their products using their own websites, 12.7% use a third-party online sales site, and 35.7% use online marketing, including social media.
- Digital tools and technology help purchasing and cut costs. 29% of rural businesses say that online tools reduce purchasing costs of products and materials.
More information about the study is available on the AboutAmazon.com website.